Before Retiring, Consider Ric Edelman’s Top 10 List

PBS_RYR_Ric_and_LynLast night on PBS Hawaii, I watched as Ric Edelman, a #1 New York Times best-selling author, shared key points on what we all need to know right now to, as he puts it, “RESCUE YOUR RETIREMENT”. Edelman points out that, “if you’re like millions of other Americans, you could be making costly mistakes with your investment and retirement accounts that interfere with your efforts to provide yourself and your family with financial security.” This television special, exclusive to PBS, highlighted some of the big mistakes investors make, and explores fascinating insight into the science of financial decision making.

At The Wheeler Group, we specialize in retirement accumulation, and distribution planning (i.e. ensuring you will never outlive your resources, etc.) through tax-advantaged programs and life insurance products. Recently, I helped a client for whom retirement is on the near horizon. With her, I explained in detail how annuities and insurance are the essential foundational elements of a diversified portfolio, and we both agreed that safety through guarantees is paramount. The way I see it, big returns are spectacular and exciting, but no-risk guarantees in retirement planning are priceless.

In the PBS special, Edelman said that if retirement is on your horizon, consider these ten points:

  1. Decide how you are going to spend your time. What are you going to do during the first 6 to 12 months in retirement, and what do you plan to do for the rest of your retired life?
  2. Determine (realistically) how much money you will spend monthly. Remember to include periodic expenditures such as gifts, vacations, taxes, an occasional new car, and emergencies.
  3. Anticipate the cost of health care. You’ll have no employer to pay this for you; Medicare, MediGap, and private insurance are all up to you.
  4. Buy long-term care insurance. Now.
  5. Refinance your mortgage. Many people are shocked to discover that they either cannot borrow money after they retire, or they are forced to pay higher rates.
  6. Boost your cash reserves. Make sure your rainy day fund is enough to cover at least six months’ worth of expenses.
  7. Evaluate your sources of income. You have already figured out what you’ll spend on a monthly basis. Now figure out where that money will come from.
  8. Revise your investment strategy. The way you’ve handled your investments over the past 30 years is not how you should handle them for the next 30. While preparing for retirement, you were focused on asset accumulation. When you’re in retirement, you need to focus on income and on keeping pace with the increasing cost of living. Assets must be flexible and liquid so you can meet needs you did not anticipate. New words will enter your vocabulary: rollovers and lump sums.
  9. Review your estate plan. Review your will and trust. Don’t have them? Get them. These documents can protect you and your assets while you are alive and benefit your spouse and children when you pass on.
  10. Perhaps the most important thing of all. If you are not excited about retirement, then don’t. Many people quickly become bored after retiring. It’s OK — even exciting — to return to school or the workplace. Many do this, often in completely new fields.
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